How to cut your home energy costs

It has never been more expensive to keep your home warm. Alex Rankine explains how to keep your home energy costs down

Keeping the house warm has never been pricier. UK wholesale gas prices have hit another record: at £3.24 a therm they are dramatically higher than the 50p level seen for much of last year, and energy suppliers are dropping like flies. Zog Energy has just become the 25th firm to go to the wall over the last four months. The renewed surge in wholesale prices means more could follow. 

If your energy supplier goes bust then regulator Ofgem will switch you to a “supplier of last resort”. Just remember to take a meter reading to send to the new supplier. Shopping around for a better deal seems pointless – as Miles Brignall puts it in The Guardian, “normally, switching would be the response to rising prices”, but “the energy market has all but seized up”.  

At present, there are no deals better than the standard variable tariff, which is price-capped, says Martin Lewis of MoneySavingExpert. A “typical” household using the cap should expect to pay £1,277 a year for gas and electricity (the cap applies to the per kilowatt [kWh] price, it does not actually cap the overall bill). 

Given soaring wholesale gas prices, that is below the level energy firms need to break even, which is why so many are going bust. Instead of switching, most people should “do nothing”, allowing themselves to go onto the standard variable tariff when their fixed deal ends (or their energy supplier goes bust). While the price cap is insulating consumers from the heat in global energy markets for now, that will change when it is next reviewed in April. With wholesale prices soaring, the cap looks likely to rise to somewhere over £1,700 a year for a typical user, an eyewatering increase. 

Where to make savings

In the meantime, what can you do to cut your energy bills? Heating accounts for more than half of an average energy bill. The Energy Saving Trust suggests keeping the thermostat at “the lowest temperature you are comfortable with… typically between 18 and 21 [°C]”, says Helena Kelly in The Daily Mail. 

Washing machines and dishwashers account for a quarter of an average household’s electricity usage. “Turning the temperature down to 30°C on a washing load can cut electricity usage by 57%.” Turning TVs and laptops off standby could save up to £35 a year. 

It can pay to invest in more energy efficient appliances, says Sarah Ingrams for Which, whose research finds that a more energy-efficient tumble dryer could save you £106 a year in annual running costs compared to the most “power-guzzling” model available, while choosing a more efficient fridge-freezer could save up to £76 a year. Replacing an old G-rated gas boiler for a modern A-rated condensing one could save someone living in a typical semi £195 a year in heating costs, or £300 in a detached house. And, while electrical heating is much pricier than gas, “if you only need to heat one room in your house, it may be cheaper to use a portable electric heater and keep the thermostat turned down”. 

Running a 3kWh plug-in heater for four hours costs about £2.26 at current prices, says Levi Winchester in the Daily Mirror. Do that every night of winter and the bills will quickly rack up. A 1.275kWh dishwasher costs 22p to run for an hour, while an electrically-heated shower costs roughly 24p “for just ten minutes of use”.  Still, if you’re feeling chilly, have a cuppa: brewing water for one cup of tea only uses about 1p of energy. 

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